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The Government have broken all their promises and have taxed more and delivered less. The Gracious Speech shows that they have no vision for the future. The Opposition have a vision, founded on a disciplined approach to macro-economic management. We will be ruled by five disciplines: first, we will have our own currency; secondly, we will increase the independence of the Bank of England; thirdly, we will set up a fiscal policy watchdog; fourthly, we will establish a national accounts commission; and fifthly, the Government will spend only what the nation can afford.
My policy is to keep the pound. The Chancellor wants to scrap it, and he has devised five completely subjective tests to hide behind until the Government believe that they can get away with that. We plan our policy on the basis of Britain's having its own autonomous monetary policy. The Chancellor is unable to say whether his plans for the next Parliament are based on Britain's having such a policy. That is a glaring gap at the centre of his policies.
We shall make the Bank of England more independent. The Chancellor wants to take away its powers. His policy is to let the European central bank set interest rates. At the next election, there will be only one party fighting for Britain's interest rates to be set by an independent Bank of England, and that will be the Conservative party.
I plan to put an end to the Chancellor's spin on and distortion of the making of economic policy. I will establish a committee of expert commentators to sustain an open debate about economic policy making.
The Chancellor claims to be tied by fiscal rules, but they tie him to nothing. The so-called golden rule that allows him to borrow for so-called investment would enable him to borrow between £150 billion and £300 billion over the cycle, depending on what he chose to call investment. No wonder he has to repeat the word "prudence" again and again, like a man trying to convince himself. The more he spoke of his honesty, the faster we counted the spoons.
We have had enough of the Chancellor distorting the figures and disguising his tax increases. We have had enough of Budgets that are all spin and that fail to tell the public that he has raided their savings or put petrol up by three times more than pensions. We are tired of him massaging the statistics and claiming that Government spending is not Government spending. The OECD and the ONS are fed up with him too, and have criticised him for his sleight of hand. We shall therefore appoint a national accounts commission to put the nation's accounts on a proper footing.
The Chancellor thinks that Government statistics should tell a story, but we believe that they should tell the truth. My policy is for the Government to spend what the country can afford. Having promised so much before, the Chancellor now promises the earth whether the country can afford it or not. Ours is the only genuinely sustainable policy. It allows tax cuts for hard-working families, pensioners and businesses. Those who would follow a different path should say where the money would come from. The Conservative party never forgets that it is the people's money.
Mr. Dobson: The right hon. Gentleman says that he would take a disciplined approach to public borrowing. He wants to be the Chancellor of the Exchequer, so I remind him that he has already been a Treasury Minister. When he was Chief Secretary to the Treasury, his disciplined approach to public borrowing resulted in a public sector borrowing requirement of £47 billion in his first year and £50 billion in his second. One of the economy measures that he pushed through to try to put that right was to reduce the number of nurses going into training to a measly 12,000. That is one reason why the national health service is so short of nurses now.
Mr. Portillo: All the right hon. Gentleman's figures are wrong for the years in which I was at the Treasury. However, I agree that there are dangers when an economy goes into recession. Consequently, any prudent Chancellor of the Exchequer would plan to grow public spending by less than the underlying trend growth rate of the economy. If that is not done, we will end up in the same difficulties again. Only a man with the arrogance of the current Chancellor could believe that the economic cycle has been abolished.
Mr. Dobson: The right hon. Gentleman said that I misled the House. He was Chief Secretary to the Treasury in 1992-93 and 1993-94. The official figures show that the borrowing total was £47 billion in 1992-93, and £50 billion in 1993-94. On top of that, the figures show that almost 3 million people were out of work at that time, compared with slightly more than 1 million today.
Mr. Portillo: I tell the right hon. Gentleman this: we have reached a state of affairs with the Labour party in which every figure is fiddled, everything is distorted, and everything is spun. It can barely surprise anyone that no Opposition Member, no Labour Member and no member of the public believes a word that it says about anything.
It is outrageous that the Chancellor of the Exchequer postures as the pensioners' friend. Before the general election, he promised to end means-testing for pensioners. Now, he has done exactly the opposite. There is more
The problem is that this year's national insurance contributions pay this year's pensioners. The money is never invested and never grows, so pensioners are not able to participate in the growing wealth of the nation. We want to give young people the option of paying their contributions into a fund that would be invested and that would grow.
Such an arrangement would also, over time, sharply reduce the burden on future generations of taxpayers. The Chancellor's policy is to discourage saving and to raid the pension funds of those who are saving for their retirement to fund his spending spree today. Our policy is to encourage the young to save, so that they can look forward to retirement free from means-testing and free from financial worry.
Mr. Matthew Taylor: Given that, under the Conservatives' plans the national insurance fund would have not only to pay pensions to current pensioners but contribute towards the pensions of a future generation, would the right hon. Gentleman cut pensions to make up the gap? If not, which tax would he increase to fund the proposed addition?
Mr. Portillo: I would not go down either route. However, I am shocked by the implied timidity of the question asked by the hon. Member for Truro and St. Austell (Mr. Taylor). We have a huge liability to pay pensions decades and decades ahead, and it is a real liability. The Government like to pretend that that liability does not exist, and that is why we now have national accounts that do not identify it. However, the liability